Tax Refund Conditions

If you have lived in China for no more than 183 consecutive days, and your date of departure is within 90 days from the date of purchase of the tax-free items, and the total amount of VAT-free items purchased in a single tax refund shop on a single day reaches RMB 500, you can enjoy the departure tax refund benefit.

Tax Refund Rate

The general VAT refund rate for taxable items is 11%, but you may also need to pay a certain service charge.

VAT refunds for departing passengers are handled by the tax refund agency located in the restricted area of departure ports where the outbound formalities for foreign passengers are handled. Foreign passengers must submit their valid identity documents, the Departure Tax Refund Application Form verified and stamped by the Customs, and the sales invoice of the refundable items to apply for a refund. The VAT refund rate for items subject to the 13% VAT rate is 11%, and for items subject to the 9% VAT rate is 8%.

VAT refundable = sales invoice amount (including VAT) × VAT refund rate

Service charge = sales invoice amount (including VAT) × service charge rate (2%)

Net VAT refund amount = the amount of VAT refundable – service charge by tax refund agencies

Tax Refund Process

When leaving the country, you may apply for tax refunds at the Customs with the Departure Tax Refund Application Form provided by the tax refund store, sales invoices for the refundable items, tax-refundable items, passport and other valid identification documents. After verification and stamping by the Customs, the tax refund agency located in the restricted area of the departure port will handle the tax refund procedures.

Refund Currency and Receipt Method

The refund currency is RMB. For refund amounts not exceeding RMB 10,000, you can choose a cash refund or bank transfer. For amounts exceeding RMB 10,000, the refund will be processed through bank transfer.

"Refund-upon-Purchase" Service for Departure Tax Refund

Under China's "Refund-upon-Purchase" service for departure tax refunds, when foreign tourists purchase tax-refundable goods at designated stores in regions implementing the departure tax refund policy, they can immediately claim a cash advance equivalent to the tax refund amount (hereinafter referred to as "advance payment") at the store after signing an agreement and completing credit card pre-authorization procedures.

Foreign tourists wishing to utilize this service must meet the following requirements: They must pass customs verification upon departure, exit through designated ports within the agreed time frame as stipulated in the agreement, and comply with all policy regulations governing departure tax refunds.

Procedures for "Refund-upon-Purchase" Service:

(1) Store Issuance & Advance Payment. At designated "Refund-upon-Purchase" stores, when foreign tourists purchase tax-refundable goods and opt for this service, the store or tax refund agency must present an agreement for the tourist to sign. A credit card pre-authorization is processed. The store issues a Tax Refund Application Form for Overseas Tourists and provides an on-site advance payment (equal to the refund amount in RMB);

(2) Customer Verification. Upon departure, the tourist must: present the purchased goods, Tax Refund Application Form for Overseas Tourists, sales invoice, and valid ID and declare and undergo customs verification at the port of exit;

(3) Tax Refund Agency Review. At the departure port's restricted area, the tourist must submit the following to the tax refund agency within the quarantine area of the departure port: the valid passport ID, the customer-stamped Tax Refund Application Form for Overseas Tourists, and sales invoices. The tax refund agency shall review the relevant material information and handle the following different scenarios accordingly.

• For tourists who depart through designated ports within the agreed time frame as stipulated in the agreement and comply with all departure tax refund policy requirements, the tax refund agency shall release the credit card pre-authorization and finalize the tax refund procedure, with the advance payment being recognized as the official tax refund. For cases that fail to meet the departure tax refund requirements, the tax refund agency shall recover the advance payment through the credit card pre-authorization charge and will not process any tax refund for this transaction.
• For passengers who fail to comply with the agreement terms—either exceeding the promised departure period or not departing from designated ports—the tax refund agency shall recover the advance payment through credit card pre-authorization deduction within three business days after the promised departure date expires. When the passenger departs subsequently, the tax refund agency at the departure location shall then review and process the tax refund according to the departure tax refund policy regulations.

[For details, please refer to the Announcement on Nationwide Implementation of "Refund-upon-Purchase" Service for Overseas Tourists by the State Taxation Administration]